A

SUMMER INTERNSHIP REPORT ON

“A STUDY ON INVESTMENT PREFERENCE AMONG

MUTUAL FUND, DIRECT EQUITY AND FIXED DEPOSIT”

AT

J.V. VASANI AND CO.

SUBMITTED BY: -
TISTA PATEL
Roll Number -300034

Masters of Business Administration (MBA)

THE MAHARAJA SAYAJIRAO UNIVERSITY OF BARODA

(2019-21 BATCH)

Page | 1
 INTERNSHIP CERTIFICATE

Page | 2
 DECLARATION

I do hereby declare that this project report entitled “A STUDY ON INVESTMENT

PREFERENCE AMONG MUTUAL FUND, DIRECT EQUITY AND FIXED DEPOSITAT”
JV Vasani and CO. submitted to The M. S. University of Baroda, under the
guidance of Mr. Vishal bhatt. The report is based on the study undertaken by
me, to the best of my knowledge.

I also declare that all the information collected from various Primary and
Secondary sources have been duly acknowledged in this project report.

Page | 3
 ACKNOWLEDGEMENT

Every accomplishment is the outcome of the hardwork and co-operation of all

the people joined in it. The satisfaction that I felt at the successful completion
of my report would be incomplete if I don’t consider all the people whose
proper guidance and encouragement me.Through this acknowledgment, I
express my sincere gratitude towards all those people who have helped me in
the preparation of this project, which has been a learning experience. . I am
gratified towards our college “Faculty of Management Studies, M.S University
Baroda” for always giving me support where needed. I am gladly thankful to
my guide Prof. Smita Trivedi and Dean of our Faculty Prof. DR M N Parmar
for always being a great source of inspiration and providing the required
guidance. I would like to express my gratitude towards Mr. Vishal bhatt for
their invaluable support and guidance during my tenure at the organisation.I
would like to express my gratitude to all the respondents who took out their
time from their schedule and discussion about their investment pattern and
their views about wealth management.

Page | 4
 Executive summary

J.V. VASANI AND CO. are a premier Chartered accountant firm founded in
1994, by CA Jignesh V. Vasani, offering professional services in areas of audit,
direct tax, indirect tax, company law, management consultancy and project
finance services and investment consultancy to domestic and multinational
business entities.

The first part of report contains the introduction of topic covering introduction
of mutual fund, introduction of direct equity and introduction of fixed deposit.
Comparison of mutual fund with direct equity and Comparison of mutual fund
with fixed deposit.
The data for the study was collected primary and secondary sources. For
gathering primary data, I have taken sample of 120 respondents. The research
helped in knowing the various results and investors preference for the
investment and which factor they consider before investment and knowing
advantages and disadvantages of each investment option of this study.

Page | 5
 CONTENTS
SR NO. CONTENTS PAGE
NO.
1 ABOUT THE COMPANY 07

3 ABOUT TOPIC 09

4 OBJECTIVE OF STUDY 19

3 RESEARCH METHODOLOGY 20

5 DATA ANALYSIS AND INTERPRETATION 21

6 RESULTS AND KEY FINDINGS 36

7 LIMITATIONS OF STUDY 38

8 CONCLUSION/SUGGESTIONS 39

9 ANNEXURE 40

10 BIBILOGRAPHY 45

Page | 6
 ABOUT THE COMPANY
J.V. Vasani and CO. are a premier Chartered accountant firm founded in 1994,
by CA Jignesh V. Vasani, offering professional services in areas of audit, direct
tax, indirect tax, company law, management consultancy and project finance
services and investment consultancy to domestic and multinational business
entities.

Our motto is “Ashay the bhavisti” which means your future is secured in our
hands. We assure our clients that their future is secure by giving them services
with professional approach and helping them to flourish in all sphere.

Our philosophy is of partnering with our clients and not being a distant service
provider. Since every businesses are inherently different, we tailor our services
to meet client’s specific needs and banish the ‘one-size-fits-all’
standardization.We recruit, train, motivate and retain highly capable and
sharpest talent, who bring quality in their work and deliver the best solutions.

Headquartered in VAPI with branches at Valsad, Silvassa and Ahmedabad, we

have associate offices at 8 locations in India and leverage our state-of-art
infrastructure, wide network, best practices and people development
programs. Under the able direction of our 10 partners and associates, JVV’s
team strength of over 50 Skillfulmembers which are uniquely positioned to
provide you quality opinions and services. Our Interdisciplinary approach
renders to give you seamless value.Serving to the wider business community
since more than 23 years, we enjoy unparalleled reputation and respect of our
clients, who trust and rely on us for our expertise and professionalism.

Mission
To provide businesses, entrepreneurs and individuals with the highest quality
accounting, auditing, tax planning, business advisory and management
consulting services delivered in a timely, efficient and innovative manner by a
professional team that clearly enjoys working together to exceed their clients'
needs and add value to clients' business.

Vision
Page | 7
To be the most highly respected professional firm in the region where clients
comes for the peace of mind that their interests are being cared for by a team
that enjoys working with them and one another.

Motto
Our motto is “Ashay the bhavisti” which means your future is secured in our
hands. We assure our clients/ persons associated with us that their future is
secure by giving them services with professional approach and helping them to
flourish in all sphere.

SERVICES

Financial Planning & Advisory

JVV offers multi-disciplinary advisory services to clients in its main

areas of practice.

Start Up Advisory

We offer a unique bouquet of services, tailor-made for the unique

requirements of a startup or an entrepreneur

VALUE ADDED TAX

The firm along with rendering procedural services viz. registration

and filing of MVAT returns, is providing the following services for
Maharashtra Value Added Tax

SERVICE TAX, COMPANY LAW ,BUSINESS

RESTRUCTURING,VALUATION ETC.

Page | 8
 ABOUT TOPIC
Investment avenues in India Savings form an important part of the economy of any nation. With the
savings invested in various options available to the people. Indian financial scene too presents a
plethora of avenues to the investors. Though certainly not the best or deepest of markets in the
world, it has reasonable options for an ordinary man to invest his savings. Banks are considered as
the safest of all options, banks have been the roots of the financial systems in India. Promoted as the
means to social development, banks in India have indeed played an important role in the rural up lift
men. For an ordinary person though, they have acted as the safest investment avenue wherein a
person deposits money and earns interest on it. The two main modes of investment in banks,
savings accounts and fixed deposits have been effectively used by one and all.

Stock markets provide an option to invest in a high risk, high return game. While the potential
return is much more than 10-11 percent any of the options discussed above can generally generate,
the risk is undoubtedly of the highest order. But then, the general principle of encountering greater
risks and uncertainty when one seeks higher returns holds true. However, as enticing as it might
appear, people generally are clueless as to how the stock market functions and in the process can
endanger the hard-earned money.

Mutual Funds are essentially investment vehicles where people with similar investment
objective come together to pool their money and then invest accordingly. Each unit of any scheme
represents the proportion of pool owned by the unit holder (investor). Appreciation or reduction in
value of investments is reflected in net asset value (NAV) of the concerned scheme, which is
declared by the fund from time to time. Mutual fund schemes are managed by respective Asset
Management Companies (AMC). Different business groups/financial institutions/ banks have
sponsored these AMCs, either alone or in collaboration with reputed international firms. Several
international funds like Alliance and Temple ton are also operating independently in India. Many
more international Mutual Fund giants are expected to come into Indian markets in the near future.

Fixed deposit is a type of financial instrument offered by banks which is referred as one of the
safest investment options available. Fixed Deposit provides a higher rate of interest than a regular
savings account. Banks provide flexibility in selecting Fixed Deposit tenure which can vary from 7
days to 10 years. FD interest rates depend upon various factors such as the tenure of the deposit,
economic conditions, investment amount, age of the investor and bank’s policies.Additionally, banks
and financial institutions provide various features added to the normal fixed deposit like a sweep in
deposit facility, tax saver FD, loan against fixed deposit and much more. In other words, fixed
deposit provides high returns on the investment, greater flexibility, high stability and safety of
investor’s hard-earned money.

Introduction About Direct Equity:

Direct equity investment can be very rewarding. We must always remember that direct equity
investing can be very risky. In order to negate the associated risk with direct equity considerable
research of individual stock is required. Without spending sufficient time and energy for doing stock

Page | 9
research, we shall not invest directly in equity. In this article I have tried to answers almost all
nagging question about direct equity investment that will help my readers to take a wise decision to
invest directly in equity.

 What it is like to invest in directly in equity?

Compared to any other asset class, direct equity investment is far riskier. It demands lot of
skill to make profits by investing directly in equity. However, we also know that riskier
options also opens doors for higher possible returns. The returns of equity in long term has
outperformed every other asset class. We can see for our-self how equity has performed in
last 20 years. If we invested in a index fund in year 1983 our CAGR would have been close to
11% per annum. It means in last 20 years our principal amount would have multiplied by
more than eight times.

 So what is investing in direct equity all about?

Direct equity investing is all about long term growth. When we buy equity (shares) of a
company, we become part owner in that company. This way we become partner in its
growth opportunities and we also share their losses. Why investors prefer equity is because
this is the only investment options that promises long term growth which beats inflation.
No other investment option can beat inflation the way equity can.

 To become a successful Equity investor one must follow the following rules:
Choose a right company – It is important for an investor to select a right company. This
means selecting a company which offers good growth opportunities. A company which has
strong business fundamentals are good stocks to buy for long term.

 Invest at right time –

Timing the market is essential in direct equity investment. When we are investing directly in
equity timing of buying and selling of stocks is most important. In short term share market is
driven by speculation. But in long term companies fundamentals negate the effect of
speculative forces. Long term investment horizon allows the investor to take advantage of
the company’s growth. Company cannot show growth in short term. Their growth is more
visible in time span of three years or more. It means if we are investing directly in equity we
must assure holding time of three years or more. Buying shares of right company at right
price is what is required to make money in stock market. No matter how good is the
company, if we are not timing the purchase well we will not get the desired results. Timing
the market means buying shares at undervalued price levels.

 What kind of return we can expect from equity?

If we agree to stay invested for long term, then direct equity investment for sure will beat inflation.
Generally returns from equity beat inflation by about 4-5 percentage points. It means, if average
inflation in last 20 years has been 7% per annum then average return from share market will be
between 11%-12%. The return from direct equity can be increased by practicing value investing.
Investing in direct equity, in short term, is very risky due to price volatile of stocks. By practicing
speculation a person can make up to hundred percent return. But at the same time there far higher

Page | 10
chances making very big losses. This is why when we talk about direct equity investment we must be
very aware of the risk-return trade-off. We must learn to take calculated risk. Too must risk with
expectation of abnormal returns is foolishness.

 How should one invest in equity?

One can invest in a equity either directly by buying shares or indirectly through mutual funds.
Direct Equity – By Purchasing shares from Stock Market When a company offers its shares to the
public for the first time it is called as IPO. In an IPO the company sells a certain percentage of its
ownership to the public at a certain price. Once the shares were issued to the public through an IPO
stock exchange’s facilitate the trading of shares in secondary market . Now we no longer have to
wait for the company to issue shares again.

For buying and selling of shares one need a demat account and online trading account. Through a
demat account and online trading account one can trade shares online. But before one goes ahead
to buy shares one need to take care of following:

Invest for long term – One must invest in shares only for long term horizon.

Diversify your investments – Do not put all eggs in one basket. As a thumb rule, one should not have
more than 50% of portfolio composition in stocks. Too many stocks (of different companies) is also
not good. It will be difficult to monitor them. One shall not hold more than fifteen to twenty
different shares in ones portfolio.

Invest intelligently – You don’t have to be a genius to be a successful investor. You need to become
a disciplined investor

(1) Before you buy a share, write down objective so as to why you are buying this share.

(2) Analyze company’s balance sheets profit and loss accounts and its cash flow statements &

(3) If you see that a share is not performing even in tune with the markets performance, do not
hesitate to sell it.

Short-selling is not a crime – If you have decided to short-sell a share you must have a good reason
for doing it. Short selling is taxable and we must try to avoid it unless we have good reason for doing
it.

Resist the temptation to buy more only because you want to average your cost– Never buy shares
of a company just because its price is falling. There are times when you know that you have bought
share of an excellent company but at a very high price. In this case you can consider averaging your
cost by buying at price dips. But one must remember that this approach will only work if one holds
the share for long term.

Do not hesitate to correct the mistake even if it means to sell your shares for a loss – There are
times when we buy a share and a very high price. But holding on to the share for a long time is even
a bigger mistake. We must sell such shares, and buy other shares which are of more value (like pays
higher & regular dividends). Tax implication when we invest directly in equity.

Page | 11
Capital gain tax – If we sell shares between a year of its purchase, capital gains tax of 10% will be
applicable on profit. However if we sell share after holding time of one year it will not be taxable.

Tax on dividend – All dividends are tax free.

 Advantages of investing in direct equity

Dividend :-An investor is entitled to receive a dividend from the company. It is one of the
two main sources of return on his investment.

Capital Gain:-The other source of return on investment apart from dividend is the capital
gains. Gains which arise due to rise in market price of the share.

Rights shares:- Whenever companies require further capital for expansion etc, they tend to
issue ‘rights shares’. By issuing such shares, ownership and control of existing shareholders
are preserved and the investor receives investment priority over other general investors.
Right Shares are issued at a price lower than current market price of the equity share. So,
existing investor can take that advantage or otherwise can renounce right in some one’s
favor to get value of right.

Bonus share:- At times, companies decide to issue bonus shares to its shareholders. It is
also a type of dividend. Bonus shares are free shares given to existing shareholders and
many times they are given in lieu of dividend.. Liquidity:-The shares of the company which is
listed on stock exchanges have the benefit of any time liquidity. The shares can very easily
transfer ownership.
 Disadvantages of investing in direct equity
Dividend:-The dividend which a shareholder receives is neither fixed nor controllable by
investor. The management of the company decides how much dividend should be given. If
there is a loss, there is no question of dividend.

Higher risk:-Equity share investment is a risky investment as compared to any other

investment like debts etc. The money is invested based on the faith an investor has in the
company. There is no collateral security attached with it.

Fluctuation in market price:-The market price of any equity share has a wide variation. It is
always very difficult to book profits from the market. On the contrary, there are equal
chances of losses.

Page | 12
 INTRODUCTION ABOUT MUTUAL FUND

 What is mutual fund ?

A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciations realized are shared by its unit holders in
proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable
investment for the common man as it offers an opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low cost.

Today, the mutual fund industry in the country manages around Rs 100,000 crore of assets,
a large part of which comes from retail investors. Markets for equity shares, bonds and
other fixed income instruments, real estate, derivatives and other assets have become
mature and information driven. Price changes in these assets are driven by global events
occurring in faraway places. An individual also finds it difficult to keep track of ownership of
his assets, investments, brokerage dues and bank transactions etc.A mutual fund is the
answer to all these situations. It appoints professionally qualified and experienced staff that
manages each of these functions on a full time basis.

 Organizational set up of a mutual fund:

 Net asset value (NAV) of a scheme

Net asset value denotes the performance of a particular scheme of a mutual fund. Mutual funds
invest the money collected from the investors in securities markets. In simple terms, NAV is the

Page | 13
market value of the securities held by the scheme. Since market value of securities changes every
day, NAV of a scheme also varies on a day to-day basis. The NAV per unit is the market value of
securities of a scheme divided by the total number of units of the scheme on any particular date.

 Type of mutual fund

By Structure:-
Open–ended funds: Investors can buy and sell units of open-ended funds at NAV related price every
day. Open-end funds do not have a fixed maturity and it is available for subscription every day of the
year. Open-end funds also offer liquidity to investments, as one can sell units whenever there is a
need for money.

Close-ended funds: These funds have a stipulated maturity period, which may vary from three to 15
years. They are open for subscription only during a specified period. Investors have the option of
investing in the scheme during initial public offer period or buy or sell units of the scheme on the
stock exchanges. Some close-ended funds repurchase the units at NAV related prices periodically to
provide an exit route to the investors.

Interval Funds: These funds combine the features of both open and close-ended funds. They are
open for sale and repurchase at a predetermined period.

 Advantages of investing in mutual fund

Diversification: A single mutual fund can hold securities from hundreds or even thousands of
issuers, far more than most investors could afford on their own. This diversification sharply
reduces the risk of a serious loss due to problems in a particular company or industry.

Page | 14
 Liquidity: Shares in a mutual fund can be bought and sold any business day, so investors
have easy access to their money.
Professional management: Few investors have the time or expertise to manage their
personal investments every day, to efficiently reinvest interest or dividend income, or to
investigate the thousands of securities available in the financial markets. They prefer to rely
on a mutual fund's investment adviser.
 Disadvantages of investing in mutual fund

No Guarantees: No investment is risk free. If the entire stock market declines in value, the
value of mutual fund shares will go down as well, no matter how balanced the portfolio.
Fees and commissions: All funds charge administrative fees to cover their day-to-day
expenses. Some funds also charge sales commissions or " loads" to compensate brokers,
financial consultants, or financial planners.
Management risk: When you invest in a mutual fund, you depend on the fund's manager to
make the right decisions regarding the fund's portfolio. If the manager does not perform as
well as you had hoped, you might not make as much money on your investment as you
expected

INTRODUCATION OF FIXED DEPOSIT

Fixed deposit is a type of financial instrument offered by banks which is referred as one of the safest
investment options available. Fixed Deposit provides a higher rate of interest than a regular savings
account. Banks provide flexibility in selecting Fixed Deposit tenure which can vary from 7 days to 10
years. FD interest rates depend upon various factors such as the tenure of the deposit, economic
conditions, investment amount, age of the investor and bank’s policies.

Fixed Deposit provides guaranteed returns on investments. The fixed deposit interest rates
applicable (at the time of investment) are what the bank commits to pay on their investments and
are always risk-free.

 Type of fixed deposit

Normal Fixed Deposits

1. Deposit money for a fixed tenure.

2. Tenure can range from 7 days to 10 years.

3. Interest rates higher than a normal savings account.

Tax-Saving Fixed Deposits

1. Tax exemption on the principal deposit amount of up to Rs.1.5 lakh in a calendar year.

2. Lock-in period of 5 years within which you cannot withdraw the amount.

3. Allows only one-time lump sum deposit.

Page | 15
Senior Citizens’ Fixed Deposits

1. Applicable for individuals above 60 years of age.

2. Senior citizens are eligible for special rates.

3. Flexible tenures.

Cumulative Fixed Deposits

1. Interest is compounded every quarter or year and paid at the time of maturity.

2. Helps substantially grow your savings.

Non-Cumulative Fixed Deposits

1. Interest is paid out monthly, quarterly, half-yearly, or annually, as per your choice.

2. Better bet for pensioners looking for a regular source of income.

Flexi Fixed Deposits

1. Fixed deposit linked to your bank account.

2. Money shuttles between your FD and savings account.

 Advantages of investing in Fixed Deposit:

Assured rate of return: The major reason why people prefer investing their funds in a fixed deposit
is the assured rate of return. Once you invest your funds in a fixed deposit account, you can be
guaranteed of receiving the stated rate of return.

Flexible tenure: The tenure for a fixed deposit is flexible and depends on the deposit holder. Each
bank has their own minimum tenure rules however, the final decision can be taken by the deposit
holder.

Loans against fixed deposit: An FD is a dependable instrument to keep in case of financial

emergencies. Taking a loan against a fixed deposit is very easy. You can take a loan up to 95% of the
fixed deposit amount depending on the bank.

 Disadvantages of investing in Fixed Deposit:

Reducing interest rates: Even though fixed deposits have a lot of advantages, the interest
rates do not move in line with inflation. This means in some cases, they may actually earn
less than the inflation rate. The interest rates for fixed deposits have been falling in recent
times which has reduced the attractiveness of this investment.

. Locked in funds: Fixed deposits lock in your funds for a fixed duration. These funds are not
available for you to use unless you withdraw the funds prematurely. Fixed deposits are not
at all liquid and cannot be converted into cash easily.

Page | 16
 Penalties on withdrawal: Banks charge penalty to the depositors who withdraw their fixed
deposits prematurely. This penalty is in the form of a reduced rate of interest.

Fixed interest rate: The rate of interest on a fixed deposit remains the same for the entire
duration of the fixed deposit. Even if the rates increase, the bank does not pay additional
interest to the deposit holder.

COMPARISON OF MUTUAL FUND AND DIRECT EQUITY

Page | 17
 COMPARISON OF MUTUAL FUND AND FIXED
DEPOSIT

Page | 18
 OBJECTIVE OF THE STUDY
There are different objectives of the study which are as under:

1) To make comparison of mutual fund with direct equity and fixed deposit.

2) To know the different attitudes of people regarding risk, rate of return , time of period of
investment.

3) To know the investor preferred financial product for investment how much do they invest
annually.

4) To provide pros and cons of investing in direct equity, fixed deposit and mutual fund.

Page | 19
 RESEARCH METHODOLOGY
RESEARCH DESIGN
In this research both the methods are being used.

The Primary data (Questionnaires) is prepared and filled by the people who are investor in mutual
fund, fixed deposit and direct equity. The Secondary data is collected from different internet ,
reports, articles and journals.

DATA COLLECTION METHOD

The data which is collected directly from respondent to the best of my knowledge and belief of such
research is Primary data. Analysis is mainly based on the responses of the respondents.

POPULATION
Respondents are the people living in Valsad City who do investment in various financial investment
options.

SAMPLING METHOD
The sample framework consists of a people who have invested in mutual fund, equity and fixed
deposit.

Here the sample size of 120 respondents is been covered by the above sampling method. Sample
unit is individual.

DATA COLLECTION INSTRUMENT

This survey the tool for data collection is questionnaire.

Page | 20
 DATA ANALYSIS AND
INTERPRETATION

Q2 Gender

Gender Frequency Percentage

Male 77 64%

Female 43 36%

Total 120 100%

Frequency

36%
Male
Female
64%

INTERPRETATION:-

From the above table and diagram, it is known that 77 respondents are male
which is 64% and 43 respondents are female which is 36% of total respondents
of 120.

It can be said that most of the respondents are male.

Page | 21
 Q3 Age

AGE Frequency Percentage

20 - 30 years 36 30%

30 - 40 years 42 35%

40 - 50 years 24 20%

Above 50 years 18 15%

Total 120 100%

Chart Title

15%
30% 20 - 30 years
30 - 40 years
20%
40 - 50 years
Above 50 years
35%

INTERPRETATION:-

From above table and diagram, it is seen that , 30% respondents are age of
20 to 30 years, 35% of respondents are age of 30 to 40 years, 20% of
respondents are age of 40 to 50 years and 15% of respondents are age of
above 50 years. So it can be said that most respondent are the age of 30 to
40 years

Page | 22
 Q4 Academic Qualification

Qualification Frequency Percentage

Up to school 22 18.3%

Graduate 55 45.8%

Post graduate 30 25%

Professional degree 13 10.8%

Total 120 100%

Chart Title

11% 18% Qualification

Up to school
25% Graduate
Post graduate

46% Professional degree

INTERPRETATION:-

From above table and diagram, it can be known that, 22% of the respondents
are having education till school, while 45.8% of respondents are having
education up to graduation, 25% of the respondents are having education of
post graduate, only 10.8% of the respondents are having education of
professional degree. So it can be said that most of the respondents are
graduates.

Page | 23
 Q5 Occupation

Occupation Frequency Percentage

Salaried 50 41.7%

Business 29 24.2%

Professional 18 15%

Student 15 12.5%

Retired 8 6.7%

Total 120 100%

INTERPRETATION:-
From above table and diagram, it can be known that, out of the respondents
41.7% are salaried, 24.2% are doing their own business, 15% are professional,
12.5% are students, and 6.7% are retired from their occupation.

Q6 Annual income

Annual income Frequency Percentage

Page | 24
Below Rs. 2,00,000 31 25.8%

2,00,000 - 4,00,000 58 48.3%

4,00,000 - 6,00,000 19 15.8%

Above 6,00,000 12 10%

Total 120 100%

INTERPRETATION:-
From above table and diagram, it can be known that 25.8% of respondents
had their income below 2,00,000 annually,48.3% of respondents are having
annual income between 2,00,000 to 4,00,000, 15.8% of the respondents had
their annual income between 4,00,000 to 6,00,000, while 10% of
respondents are having their annual income more than 6,00,000. so it can be
said that most of the respondents are having annual income of 2,00,000 to
4,00,000.

Q7 How much do you invest annually

Annual investment Frequency Percentage

Less than 50,000 32 26.7%

Page | 25
50,000 - 1,00,000 32 26.7%

1,00,000 - 1,50,000 33 27.5%

1,50,000 - 2,00,000 13 10.8%

More than 2,00,000 10 8.3%

Total 120 100%

INTERPRETATION:-
Form the above table and diagram, it can be known that, 26.7% of
respondents are investing less than 50,000 and 26.7% of respondents are
investing between 50,000 to 1,00,000 , 27.5% of respondents are investing
their money between 1,00,000 to 1,50,000 , 10.8% of respondents are
investing between 1,50,000 to 2,00,000 and 8.3% of respondents are
investing more than 2,00,000. so it can be said that most of the respondents
invest 1,00,000 to 1,50,000 annually.

Q8 Objective of investment

Objective Frequency Percentage

Retirement 18 15%

Tax reduction 9 7.5%

Page | 26
Purchase of asset 52 43.3%

Future events 41 34.2%

INTERPRETATION:-
From above table and diagram, it can be known that 15% of the respondents
are having objective of the retirement, 7.5% of the respondents are having
objective of tax reduction, 43.3% of the respondent are having objective of
the purchase of the asset and 34.2% of the respondents are having objective
of the future events such as education and marriage. So it can be said that
most of the respondents are having objective of purchasing the asset.

Q9 What do you prefer to invest in ?

Prefer to invest 1 2 3 4 5 6

Fixed deposit 56 37 22 4 1 -

PPF 33 58 25 2 1 1

Gold 12 14 57 35 2 -

Direct equity 12 33 37 31 3 -

Govt. Bond 11 13 47 40 8 1

NPS 13 52 40 10 1 4

Mutual fund 63 37 17 2 1 -

Insurance 19 55 42 2 2 -

Page | 27
 INTERPRETATION:-
From above table and charts, it can be known that, fixed deposit and mutual
fund is most prefer investment option.

1st preference is fixed deposit and mutual fund

2nd preference is PPF, NPS and insurance

3rd preference is gold, direct equity and govt. Bond

Q10 Which factor do you consider before investing ?

Factor consider 1 2 3 4 5 6
before investment

Return 85 21 11 3 - -

Risk 78 26 13 3 - -

Tax benefits 16 39 54 9 2 -

Liquidity 14 26 60 18 1 1

Page | 28
Time period 15 20 55 27 3 -

Past experience 38 45 30 6 1 -

Knowledge 15 21 54 28 2 -

Flexibility 11 23 47 38 1 -

INTERPRETATION:-
from above table and chart, it can be known that, return and risk is most
considered factor before investing.

1st preference is return and risk

2nd preference is past experience

3rd preference is tax benefits, liquidity, time period, knowledge and flexibility.

Q11 do you prefer investing in mutual fund because of which following reason ?

Page | 29
Reason 1 2 3 4 5 6

Diversification 41 35 28 15 1 -

Professional managed 33 52 27 5 2 1

Easy to invest (SIP) 50 47 18 3 2 -

Return 65 37 12 4 2 -

Risk 56 39 20 3 2 -

Tax benefits 32 49 31 4 2 2

Liquidity 37 36 35 9 2 1

Flexibility 26 49 30 12 2 1

Saving habit 41 44 26 8 1 -

Page | 30
 INTERPRETATION:-
From above table and charts, it can be known that, diversification, SIP, return,
risk liquidity are the main reason behind the investment in mutual fund.

1st preference diversification, easy to invest (SIP), return, risk, liquidity

2nd preference professional manage,tax benefits, flexibility, saving habit

Q12do you prefer investing in fixed deposit because of which following reason ?

Reason 1 2 3 4 5 6

Liquidity 11 28 42 34 4 1

Guaranteed return 54 35 26 5 - -

Flexibility 13 31 52 19 5 -

Risk 57 27 28 8 - -

Loan against FD 40 39 31 8 2 -

Tax benefits 14 23 51 26 5 1

Saving habits 15 31 49 18 5 2

Page | 31
 INTERPRETATION:-
From above table and charts, it can be known that guaranteed return, risk and
loan against FD are the main reason behind investment in fixed deposit.

1st preference is guaranteed return, risk and loan against FD

2nd preference is liquidity, flexibility, tax benefits, saving habits

Q13 Since how many years you are investing in following investment option

Investment Less than a year 1-2 2-4 4-6 More than 6 years

Mutual fund 26 31 42 12 9

Direct equity 35 46 24 12 3

Fixed deposit 11 16 28 21 44

Page | 32
 Chart Title
50
45
40
35
30
25
20
15
10
5
0
Less than a year 01-Feb 02-Apr 04-Jun More than 6
years

Mutual fund Direct equity Fixed deposit

INTERPRETATION:-
From above table and chart, it can be known that, most respondents have
invested in fixed deposit for more than 6 years followed by mutual fund which is
invested for 2-4 years and direct equity for 1-2 years.

Q14 How much you are satisfied with your following investment?

Investment Highly satisfied Neutra Not so Least

satisfied l satisfied satisfied

Mutual fund 23 59 24 9 5

Fixed deposit 28 55 24 6 7

Direct equity 10 23 53 20 14

INTERPRETATION:-
From above table and chart, it can be said that, with fixed deposit respondents
are highly satisfied and with mutual fund respondents are satisfied while with
direct equity respondents is neutral.

Page | 33
 Q15. if you can start your investment all over again which following investment
option would you choose ?

Investment 1 2 3

Mutual fund 71 36 17

Fixed deposit 57 53 47

Direct equity 17 47 56

Chart Title

71
57 53 56
47 47
36
17 17

1 2 3

Mutual fund Fixed deposit Direct equity

INTERPRETATION:-
From above table and chart, it can be known that mutual fund is the most
prefer investment option if respondent can start investment all over again.
Followed by fixed deposit and direct equity.

Q16.which is better investment option according to you ?

Investment Frequency Percentage

Mutual fund 75 62%

Fixed deposit 30 25%

Direct equity 15 13%

Page | 34
Total 120 100%

Frequency

13%

Mutual fund
25% Fixed deposit
62% Direct equity

INTERPRETATION:-
From above table and diagram, it can be known that 62.5% of respondents
believe that mutual fund is better investment option than fixed deposit and
direct equity.

So it can be said that according to the respondents mutual fund is better

investment.

Page | 35
 KEYFINDINGS
 The study show that majority of investors believe that Mutual fund is most
preferable investment option and according them mutual fund is better
investment option compare to Direct equity and fixed deposit.

 The study show that major of the respondents are male.

 The study show that the majority of the respondents are the age of 30 to 40
years and second majority of respondents are 20 to 30 years which is 5%
less than majority out of 120 respondents.

 The study show that the majority of the respondents are graduates.

 The study show that majority of the respondents are salaried person.

 The study show that majority of the respondents are having annual income
of Rs. 2,00,000 to 4,00,000.

 The study show that there is hardly a majority of about a 0.8% respondents
are investing their money about of Rs.1,00,000 to 1,50,000 while their is
equal response for the annual investment of Rs. 50,000 to 1,00,000 and
below 50,000.

 The study how that return and risk is most influencing factor before making
any investment decision as 85 respondent choosing return and 78
respondent choosing risk out of total 120 respondent.While past experience
is the 2nd factor respondent consider, and tax benefits, liquidity, knowledge,
flexibility is the 3rd factor respondent consider before investment.

 The study show that if investor can start their investment all over again then
they will start in mutual fund.

 The study show that majority of respondent has choose return, risk easy to
invest (SIP) and diversification as their 1st preference to invest in mutual
fund with 65 respondent choosing return, 56 choosing risk, 50 choosing

Page | 36
 easy to invest and 41 choosing diversification out of total respondent of
120.

 The study show that majority of the respondent prefer guaranteed return
and risk as their 1st reason to invest in fixed deposit with 54 choosing
guaranteed return and 57 choosing risk. While liquidity, flexibility, tax
benefit and saving habits 3rd preference to invest in fixed deposit.Loan
against FD is got 40 as 1st preference and 39 as 2nd preference for
investment in fixed deposit.

 The study show that majority of the respondent are investing their money
in fixed deposit for a long period of more than 6 years, while 42
respondents investing in mutual fund for 2 to 4 years and 46 respondents
investing in direct equity for 1 to 2 years..

 The study show that 28 respondents are highly satisfied with their
investment in fixed deposit while 59 respondents are satisfied with their
investment in mutual fund and 53 are neutral about their investment in
direct equity.

 The study show that if investor can start their investment all over again 71
respondent will choose mutual fund as their 1st preference for investment
while 57 respondent choose fixed deposit as their 1st while 53 respondent
choice is 2nd for investment and 56 respondent will choose direct equity as
their 3rd preference for investment.

Page | 37
 Limitation of the study

 The study was limited to the 3 investment option mutual fund, fixed deposit
and direct equity

 Reluctance of the people to provide complete information about them can affect the
validity of the responses.

 There are chances that respondents will make assumptions while filling
questionnaire.

 The study is confined to limited period. Time was very less to conduct this research.

 The above analysis is done by the data received from the questionnaire. So the
accuracy of data depends upon the response of the investors.

 Due the constraints, survey was conducted among 120 respondents, So result can
not represent the whole market.

Page | 38
 Conclusion/Suggestions
From the study it can be conclude that most of the respondents has chosen
mutual fund as their first preference. The satisfaction with the investment is
nearly same with fixed deposit and mutual fund Mutual fund provide option
of liquidity and easy to invest minimum amount of 100 to 500 per month
according to one needs.

Fixed deposit is one of the most popular and safe investment option in
India, as it gives guaranteed return with less risk. And also provide
facilities like loan against FD. From the study it also found that most of
the respondents are investing larger part of their investment in Fixed
deposit for the longer time compare to other investment option.

Direct equity has given the highest return among all investment option.
But it also has the highest risk. From the study is also found that
respondents agree that equity gives higher return but the investment in
equity is less in all investment option, which shows that respondents are
not preferring return only while investing.

Page | 39
 QUESTIONS

Dear sir/ Madam

I, Tista patel, student of MBA 1st year at

Faculty of Management Studies (FMS-B) THE MAHARAJA SAYAJIRAO
UNIVERSITY OF BARODA, I am undertaking a research project on ‘ A study on
investment preference among mutual fund, direct equity and fixed deposit’. I kindly
request you to fill up this Questionnaire. I assure you that information provided by you
will be confidential & will be used for academic purpose only. Thank you in advance.

1) Name ___________________________________

2)Gender

Male

Female

3)Age in completed year

20-30

30-40

40-50

Above 50 years

4)Academic qualifications

School

Graduate

Post graduate

Professional degree

Other: ________________________

5)Occupation

Salaried

Page | 40
 Business

Professional

Student

Retired

6)Annual income

Below Rs 2,00,000

2,00,000 - 4,00,000

4,00,000 - 6,00,000

Above Rs 6,00,000

7)How much do you invest annually (in Rs Approx.)

Less than 50,000

50,000 - 1,00,000

1,00,000 - 1,50,000

1,50,000 - 2,00,000

8)Objective of investment

For retirement

For tax reduction

For purchase of asset

For future events (education/marriage)

9)What do you prefer to invest in? ( Please rank from 1- first preference to 6
last preference)

1 2 3 4 5 6

Page | 41
Fixed deposit

PPF

Mutual fund

Gold

Direct equity(share)

Govt. Bond/debenture

NPS

Insurance

10) Which factor do you consider before investing? (Rank from 1 first - 6 last )

1 2 3 4 5 6

Return

Risk

Tax benefits

Liquidity

Time period

Past experience

Flexibility

Knowledge

11)Do you prefer investing in mutual fund because of which following reasons? (Rank
from 1 first - 6 last)

1 2 3 4 5 6

Diversification

Professional managed

Easy to invest(SIP)

Return

Page | 42
Risk

Tax benefits

Liquidity

Flexibility

Saving habit

Investment option

12)Do you prefer investing in fixed deposit because of which following reasons? (Rank
from 1 first - 6 last)

1 2 3 4 5 6

Liquidity

Guaranteed Return

Flexible

Risky

Loan against FD

Tax benefits

Saving habit

13)Since how many years you are investing in following investment option

less than a year 1 - 2 2 - 3 more than 3 year

Mutual fund

Direct equity

Fixed deposit

14) How much you are satisfied with your following investment?

Highly satisfied satisfied not so satisfied least satisfied

Page | 43
Mutual fund

Direct equity

Fixed deposit

15) If you can start your investment all over again which following investment
option would you choose ? (Rank them 1 first to 3 last)

1 2 3

Mutual fund

Direct equity

Fixed deposit

16) Which is better investment option according to you?

Mutual fund

Direct equity

Fixed deposit

Page | 44
. Bibliography

Website:
https://jvvco.in/

www.amfiindia.com

https://en.wikipedia.org/wiki/Mutual_fund

https://www.bankbazaar.com/fixed-deposit.html

https://shodhganga.inflibnet.ac.in/bitstream/10603/102710/5/05_chapter

%201.pdf https://keydifferences.com/difference-between-stocks-and-mutual-

funds.html https://www.roarwap.com/business-environment/swot-analysis/

https://www.howandwhat.net/pestel-analysis-india/

https://groww.in/blog/mutual-funds-vs-direct-equity/

https://www.bankofbaroda.in/blogdetail.htm?23

https://www.moneycontrol.com/news/trends/24x7booking-trends/mutual-funds-vs-fixed-depo
sitsone-to-choose-1283505.html

http://www.citigroup.com/emeaemailresource/gra30616_2019_IndiaCountryU
pdate_ v9.pdf

https://www.mapsofindia.com/my-india/business/key-trends-in-the-mutual-
fund-indus try

Page | 45